Europe

Western & Eastern Europe is forecast to see minimal or negative GDP growth in 2021.

After months of negotiation, the UK and the European Union have reached a deal on “Brexit”. The UK left the EU in January 2020, for the last 12 months negotiators have been attempting to agree to the future terms of their yet to come trade relationship. The transition period ends on 1st of January 2021, the potential agreement still must go through a review and approval process, which is likely to take several additional weeks.

How the new Brexit trade agreement will impact European construction is still TBD, some industry experts believe the UK will benefit at the expense of both France and Germany.

The COVID-19 virus has triggered a severe reduction in German economic & construction activity in 2020, the thinking is that business / construction activity has shrunk by 3% to 6% in the last 6 months over pre-COVID-19 levels. German economic & construction activity (once the virus is held in check) is expected to improve, however this might take another 6 months.

European construction projects have (for the most part) slowly started to resume again, new safety requirements, social distancing and the need for personal protection have had an impact. A number of countries never stopped construction activities and others for the most part completely closed down for a period of more than 12 to 16 weeks. Construction activities in most countries are starting to move forward again as we transition into the 1st Q of 2021 and beyond.

The major countries of Europe, Germany, France, Italy and the UK construction sectors have struggled with COVID-19 since mid-March. Construction work has now gradually resumed on many construction sites across Europe. Industrial construction worker productivity is forecast to be reduced due to mandated social distancing and new safety rules.

In the UK, the housing sector is expected to weather the COVID-19  storm, however new retail construction, hotels and office construction will be in the doldrums for at least the next 12 to 18 months.  Germany, France and Italy are expected to see a similar situation.

Lots of European construction related organizations are looking at future Government funded infrastructure investment in the next couple of months to help in weathering the downturn brought on by the pandemic.

A number European of large and mid-sized construction related organizations have reduced home office staff and site based positions, the current view is that this could amount to between 15% and 25% of current staff levels.

Sweden has been the only major European country not to impose a shut down or social distancing. Worker absence has been somewhat higher, delays of various construction materials have caused some delays, however at most it has been a minor nuisance at a few construction sites. Recent reports from Sweden suggest in hindsight that lockdowns and social distancing should have been introduced like the vast majority of other countries.

The European construction sector has a reasonable chance to grow & succeed in the next 6 to 12 months & return to pre-COVID-19 levels if the virus vaccination program can be rapidly implemented to its 350 million citizens.